Next week, the NCAA will begin providing comprehensive three-year financial data to presidents and chancellors along with “dashboard indicators” that allow university leaders to compare their athletics budgets in the aggregate with peer groups. Developed in conjunction with the National Association of College and University Business Officers (NACUBO), and endorsed by the NCAA Presidential Task Force and the Division I Board of Directors, the project offers the most accurate and effective financial tool to date that is intended to inform campus decision-makers about athletics spending. After more than a year of pilot testing and input from various membership focus and advisory groups, most who have viewed preliminary presentations of the dashboard project consider it as a valuable resource in fiscal decision-making and a major improvement from previous financial reports compiled through submissions from the Equity in Athletics Disclosure Act (EADA).

 Following is an exchange with NCAA Chief Financial Officer Jim Isch, who explains the dashboard project and its intended outcomes.

Give us the “elevator speech” on what the NCAA’s dashboard indicator project is all about.

The dashboards are a graphic comparison of the annual financial picture of the institution’s athletics program versus a set of comparators. The project highlights the trends for a particular university over time for each of 26 indicators. One of the pillars of the Presidential Task Force recommendations and the NCAA strategic plan is to provide information and data to assist campus decision-makers, and the dashboard project supports that premise.

The Presidential Task Force formed three years ago to facilitate Division I reform was the impetus behind the dashboard project. What led to that group’s realization that the dashboard effort was necessary?

Within the first few minutes of the first Task Force meeting – as presidents at the table talked about their financial situations in athletics – it became clear that each had his own definition of what being self-sufficient in athletics meant. That immediately told us that we needed better definitions in reporting financial data. The Task Force also understood that with more uniform reporting comes clearer and more comparable data that can enhance decision-making. Just as the NCAA approached academic reform with the data and metrics upon which to base policy decisions, so, too, is the dashboard effort intended to provide a comprehensive, apples-to-apples comparison that informs presidents of their financial investment in athletics.

Did the Task Force believe Division I faced a crisis in financial matters?

No, but they knew that the current growth rate (two to three times the rate of growth in overall university budgets) couldn’t be maintained without impacting institutional values. And that is still the belief today. People in athletics are searching for ways to compete with the resources they have. Athletics programs have done an excellent job managing their finances; however, most presidents know that athletics can’t continue to grow at these rates – there just aren’t that many revenue sources, at least for most of the Division I membership. We know that for the last three years, only 16 institutions generated enough revenue to pay for their athletics programs. Institutions don’t have many available resources, especially given the reduction in state support that we have seen over the last decade – and given the current state of the economy. The Task Force also wanted to integrate athletics more as part of the university, which emphasizes the fact that presidents see a difference between the collegiate and professional models of athletics, and they wanted to protect the collegiate model by better integrating athletics into the university mission. They see the dashboard project as an aid in accomplishing that goal.

Among messages from the Task Force was a call to moderate the rate of increase in athletics spending. Are the dashboards intended to influence such moderation?

In the end, resource allocation is an institutional decision. Providing more accurate information through the dashboard project isn’t intended to suggest an overall reduction in spending – the Task Force never cited that as the point of this exercise. However, presidents also must understand how their institutions compare within their peer groups, and they need to incorporate the dashboards as another data point on which to base appropriate resource decisions. This is not about providing answers as much as it is providing reliable information for decision-making.

Previous data collected through the Equity in Athletics Disclosure Act are uneven at best and do not allow for institutions to compare their own spending patterns within a cohort. Talk about some of the barriers that have complicated the effort to collect clear, concise and comparable financial data on athletics programs.

In the past, presidents have received multiple sets of financial data on athletics. They see the EADA submissions, they see the athletics department data and the university books – and none of those match. The lack of clear definitions and a consistent method of reporting was a huge barrier. Indirect costs, such as the portion of the president’s office or the accounting office or the human resources office (the centralized services that support the campus departments), are a good example. When we studied previous submissions, almost half of the institutions included indirect costs as an expense line item while the other half didn’t. So right there we had a major discrepancy in the way data were reported. Having a clearer process with uniform definitions of what is required will produce better comparative data.

What was the purpose behind involving the National Association of College and University Business Officers in the development of the dashboard initiative?

In addition to the practicality of collaborating with NACUBO on those better reporting definitions, the fact that the Task Force sought involvement with NACUBO demonstrates the confidence that presidents have in their CFOs and NACUBO as an organization. The presidents value the advice and counsel of their university CFOs as an independent source of information.

How has the membership been informed of the project throughout its development, and how has the feedback shaped the initiative?

This was developed by the Task Force with quarterly oversight from the Division I Board of Directors. There also have been numerous presentations and NCAA News stories to communicate the effort, in addition to meetings with constituent groups. We also went through two pilot tests with about 70 institutions to acquire feedback and improve the product before launch. But we understand that this is the first year of the project. We’ve done our best with the assistance of our membership, advisory committees and NACUBO to prepare this as effectively as we can, but we know it’s an evolutionary process. It’s also the first time that schools have had the chance to see the data they’ve submitted – we know once they look at it there will be changes and suggestions for improvement, both from the university side and the NCAA/NACUBO side.

While university presidents and chancellors are the ultimate decision-makers in intercollegiate athletics, who else needs to be familiar with the dashboard tool?

The CFO, the athletics director and the athletics business officer should become familiar with the tool. The submission process also strategically engages some of the units outside of the athletics department, so we hope the dashboards will be a cooperative/collaborative effort from the campus financial officer and the athletics business officer. It comes back to one of the goals – this is about trying to enhance communication among the athletics department, the campus financial department and the president.

As the CFO of the NCAA, and as a former CFO of three Division I institutions, what does the dashboard project mean to you?

As a CFO, you’re always looking for reliable data, particularly from independent sources. The NCAA data reviewed by a third party is a source upon which I would want to rely. I see this similar to the accreditation process in which you’re able to evaluate your academic program against peer institutions. When I was a campus CFO, I didn’t have access to this kind of comparative data on athletics programs. I certainly would have felt more comfortable with our decisions had we had these data, rather than simply rely on anecdotal information.

What are the primary concerns you’ve heard so far from constituents?

We hear from presidents that they would like to have more detailed salary data. We hear from CFOs that they would like more direction on how to allocate indirect costs, though it’s been our goal at least early on to allow the institution to determine the allocation method in conjunction with the independent third party. In other words, we don’t want to make this a federal indirect project that takes 10 accountants to figure out. And we hear from athletics departments some concerns about whether student activity fees should be included as an allocated or generated revenue source. While institutions charge a fee to all students, many of those students attend basketball games “free.” Institutions suggest that a portion of the student fee ought to be considered as generated revenue because those student attendees would have had to purchase a ticket had they not paid a student fee. Athletics departments also want to identify contributions that athletics provides to the university, such as parking and licensing revenue. Those are among the concerns so far, but for the most part, people who have viewed the presentation like what they see.

How will the project be introduced?

The dashboards will be e-mailed to all Division I presidents and chancellors May 28, and they will be provided with a password to access the system. We also will notify the CFO and AD that the president has received the link. Then on June 5, we will conduct a panel online moderated by NACUBO President John Walda and featuring NCAA President Myles Brand, University of Cincinnati President Nancy Zimpher, University of Nebraska CFO David Lechner and University of Missouri Athletics Director Mike Alden. Following that will be a live question-and-answer session to help viewers understand the project even more.